The September quarter balance of payments figures are out and nobody will be surprise to see a blowout in the current account to -14.9 billion from a revised higher deficit of -12.3 billion in June:

On the back of an envelope, the CAD is now running around 5% of GDP if annualised. that might sustainable but you would not want to see it get much worse in the post-GFC environment of jumpy ratings agencies. Here are the internals:

For the purposes of GDP, net exports were up very slightly at 0.1% slightly better than the expected zilch. Dollar dropped 10 pips.

is it true to say that given our large overseas debt that lower rates contribute to a lower CA deficit. If this is the case then we are getting a whole lot worse despite lowering rates. What will it look like if mortgage rates are back at 8-9%?